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Trend Is Your Friend, Watch Social Networking Stocks Ahead Of Facebook (FB) IPO

171 views · Published 5 March 2012 · 4:41 · Indexed 10 November 2026

Channel: T3 Live · 2012 · News & Politics

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The market has been on a steady, methodical march in 2012, rewarding traders and investors looking to hold swing positions until a major market composure change. Technical traders should never look to make blind predictions, but rather always wait until there is a major technical signal to switch gears. 

"The trend is your friend" is one of the only trading cliches worth paying attention to, in my opinion. I am at my best in trading when I ignore everyone calling for major sell-offs, and challenge myself to hold multiple positions for big swing moves. Good and great traders, I believe, are often separated by their abilities to hold winners. Good traders have a strong command of risk management, while great traders have sound risk management and the ability to let winners run. 

Another theme I will be watching very closely over the next couple months is the social networking. I have one word for you: Facebook (FB). While we saw some new media and social networking stocks perk up on the filing of Facebook's IPO, I believe we will see historic hysteria over this new issue that will have significant spill over to the rest of the sector. 

We have stocks like Zynga (ZNGA), which derives a significant portion of its revenue from Facebook, and LinkedIn (LNKD), probably Facebook's biggest social networking competitor (or cousin), that could stand to gain the most. I also believe some less similar new issues could benefit as well. Stocks like Groupon (GRPN), Yelp! (YELP) and even Chinese names like Sina (SINA) could get a boost. FB is one of the most-hyped IPO's of all time, and I believe traders are currently underestimating the effect it will have on the market and it's sector. 


*DISCLOSURES: Marc Sperling is long GS, LNKD, VXX, ZNGA, IBM, FIO, GSVC, JIVE, REDF, SIMG, GNOM, RENN, GRPN, YELP. Short SPY.

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